- FCA launches campaign to alert savers to switch to better accounts
- About two-thirds said they would consider switching savings accounts
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The Financial Conduct Authority has launched a campaign in a bid to drive the switch from savings accounts.
The £600,000 advertising blitz will encourage people to shop around for better savings rates and will be broadcast on radio and social media, aiming to highlight how little time it takes to find a better rate.
It comes as just over half of savers said they had changed, or were considering changing, their savings accounts to take advantage of better rates than those seen in the last decade.
About two-thirds said they would consider switching savings accounts, but have not yet done so.
FCA encourages savers to switch savings accounts to get a better rate with new campaign
Sheldon Mills, executive director of consumer and competition at the FCA, said: “We know people can become discouraged for a variety of reasons, but they could make their money work harder.”
“There are great rates and it could take as little as five minutes to find a better deal.”
In December, the FCA announced it would be cracking down on banks and their slowness to pass base rate increases onto easily accessible accounts.
The watchdog also launched a 14-step plan to ensure banks and building societies pass on fair value to consumers last year.
At the time, it found that nine of the largest savings providers only transferred 28 percent of the base rate increase to their easy access accounts between January 2022 and May 2023.
Under the plan, companies offering the lowest savings rates were required to justify how their rates offer reasonable value by the end of August 2023 under the Consumer Tax which comes into force today.
The FCA said it has seen signs the savings market is becoming more competitive, with savers moving their money to take advantage of higher rates.
From July 2023 to December 2023, the amount held in interest-free bank and building society accounts fell by £13 billion and in easy access accounts, which typically have lower interest rates, by £9 billion .
Savings held in term and notice accounts, which often carry higher interest rates, increased by £24 billion.
On the other hand, household savings worth £253bn are still sitting in accounts paying low or no interest, figures from Coventry Building Society suggest.
Despite the plan, five of the biggest banks are offering savers an average interest rate of just 1.7 per cent based on deposits of £10,000, data from rate examiners Moneyfacts compare suggests.
Campaign images show how savers can quickly find a better savings account
Easy access accounts from Barclays, HSBC, LLoyds Bank, NatWest and Santanders remain in the lower quartiles of the savings best buys tables.
In contrast, the best easy-access account on the market pays 5.16 percent.
The only rate change in these banks’ products in recent months has been that of Santander when the interest paid by its easy-access saver went from 2.5 percent to 1.7 percent.
James Hyde, of Moneyfacts, said: “Despite the continued focus on passing on interest rates to savers, the big five banks have yet to make their easy access rates more competitive relative to the rest of the market. “.